Ed Grossman, President of UBM Tech Business Technology Media, is featured in eMedia Vitals to discuss paid, earned and owned media. Originally published in eMedia Vitals on 10/29/12
I’m a firm believer that like a river, marketing dollars will always find the fastest path to the sea. Our desire to improve ROI is an unstoppable force that no dam can hold back – marketing spend seeks to be maximally efficient, ever pursuing the best ROI available.
Try as we might – and many of us did try, repeatedly – we could not stop the creative destruction of the print advertising model as dollars flowed into a more measurable online banner business. That story is over; the river has overtaken us.The same story plays through again with lead generation – it has eaten/is eating list rental and banner businesses, driving for more measurable, more predictable, more efficient marketing spend, ever-shifting the burden of risk away from the media buyer to the media owner.
The question we must ask ourselves today, as we see less-efficient, less-effective marketing mechanisms swamped and overtaken by the river of progress, is the following: Where is the river heading? Into what sea will we flow? In fact we already know the answer, even if it challenges us to our core. No one does “marketing” because they want to. (Except Don Draper.) Marketing is merely a means to an end– that end being sales (aka revenue).
The current state of marketing in our own businesses is proof enough. None of us spend marketing dollars, cross our fingers and wait anymore – we test, measure, adjust, repeat. Our buying funnels are complex, multistage and in constant need of filling, nurturing and converting. And above all, we are focused on acquiring the “good leads” with predictable, profitable monetization rates. The buyer’s journey in our business – from top of funnel through to close – is something we’re intimately familiar with, and we engage them at all stages.
And if you’re like me, you live and breathe Paid, Earned and Owned media – not because they may be overused darling phrases of the day, but because they describe the spectrum of ways in which we attract, drive and nurture customers (leads) through all stages of the funnel. They are not three separate entities, three different things a marketer does in isolation – they are part of the journey on which we nurture customers through the funnel as a means to that ultimate end.
In this holistic view, a lead is no longer just a lead. Rather, a lead is a customer with variable potential, residing at any given stage of the funnel. We as marketers need to make sure we’re getting the right message to the right user at the right time to nurture them from the top of the funnel to the bottom.
Driving all stages of the funnel
Here’s where it gets hard: Today’s smartest marketers know their lead conversion rates through various stages of the funnel (e.g. “I convert 10% of my top of funnel registrants into mid-funnel qualified potential customers”). These marketers engage in strategic activities to drive all phases of funnel filling – and not just the bottom for sales.
Knowing your conversion rate through each phase of the funnel means you can then use simple math to tell you how many (and what kind of) leads you need at any given phase to make revenue goals. A customer recently told me they needed to drive $X billion in qualified opportunities (mid-funnel) into their organization a year in order to grow revenue to their multibillion-dollar goal. He wasn’t guessing, he wasn’t wondering how to spend his marketing budget – it was simple math: pour in “this many” mid-funnel leads, nurture them through to sales, and you’ve got effective, efficient predictable revenue. Mad Men to Math Men, indeed.
When acquiring leads, best-in-class marketers need to know at which level the leads properly go, and how many are needed to fill the next level. They need to know their conversion rates per segment, and evaluate each lead-acquisition and marketing effort against that baseline (e.g. “them thar’s some good leads, they converted through from mid- to lower-funnel better than the baseline rate”). And marketers need to know whether to employ earned (top, awareness), paid (mid, comparison), or owned (bottom, consideration/justification) media tactics to engage “leads.”
With this full spectrum of knowledge at hand, marketers can use data-supported math to drive a maximally efficient and effective revenue stream for sales.
Originally published in eMedia Vitals on 10/29/12